MReport July 2019

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22 | TH E M R EP O RT FEATURE Hottest Real Estate Markets—April 2019 household in the 30th percentile of income can afford to purchase 19-32% of homes that are actively listed for sale, compared with just 16% of nation-wide homes that are affordable for the U.S. household in the 30th percentile of income. What about sub-metro markets? Each quarter, releases data on the hottest counties and ZIP codes in the country, and we do an annual review focused on the hottest ZIP codes in the coun- try. In previous years, affordable, close-in ZIP codes in hot metro markets have dominated the list, as they attract the younger buyers who heat up real estate markets. We'll soon see if that trend persists. With home prices in most U.S. real estate markets having now risen for more than seven consecutive years, affordability is a primary concern for homebuy- ers, especially millennials who are more likely to be first-time buyers. Homeownership rates for the young lag behind those of older households, so younger buyers are less likely to have accumulated home equity as a result of the previous rise in prices. Nor is it only younger buyers who are concerned about afford- ability. Investors have tended to purchase homes in the more af- fordable end of the spectrum, often competing with younger and first- time home buyers for inventory. VERY COLD COOL WARM HOT VERY HOT While a hot market might help listing agents, buyer's agents may find that guiding them through an extra-competitive market requires more patience and expectation management. We continue to see the dynam- ic of demand outstripping supply among affordable homes. For- sale homes priced at $200,000 or lower are scarce, with the number declining by 8% from a year ago as of April 2019. By contrast, the number of homes for sale priced above $750,000 grew 11% in the same period. Meanwhile, page views for the lowest-priced homes are high, 1.2 times overall page views, and growing, up 2% from a year ago. This contrasts with page views for more expensive proper- ties, which lag behind overall page views (0.7 times) and declined 1% from a year ago. Although price growth has slowed recently, to the point where it now lags behind the 3%-plus wage growth seen, home prices remain at an elevated level, and we expect affordability to continue to be an important factor in real estate mar- kets for the year ahead. As Chief Economist for, DANIELLE HALE is responsible for developing and translating real estate trend data into consumer and industry insights. She also leads Realtor. com's team of the industry's top analysts and economists with the goal of providing deeper and broader housing insights to people throughout the home journey, industry professionals, and thought leaders. Before joining in July 2017, Hale spent nearly a decade as an economist and policy researcher at the National Association of Realtors (NAR). As managing director of housing research, Hale oversaw the production of closely followed housing market data, including NAR's monthly pending and existing home sales indices and quarterly home price reports. Top 20 Hottest Housing Markets—April 2019 Boston-Cambridge-Newton, MA-NH 1 32 $567,772 7% Lafayette-West Lafayette, IN 2 34 $227,000 8% Spokane-Spokane Valley, WA 3 31 $325,000 12% Columbus, OH 4 34 $259,000 6% Sacramento-Roseville-Arden-Arcade, CA 5 34 $485,000 3% Midland, TX 6 36 $368,725 5% Rochester, NY 7 39 $212,450 12% Colorado Springs, CO 8 32 $402,500 2% Odessa, TX 9 36 $322,500 33% Worchester, MA-CT 10 40 $329,900 10% Metro Rank Median Days on Market Median Listing Price Listing Price Increase YOY

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